&uot Erisa and Disability Benefits Law Blog: Ninth Circuit: Non-Lawyer Fees Awardable in ERISA Delinquent-Contribution Case
08 | 31 | 2006 Posted By John Wood
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Ninth Circuit: Non-Lawyer Fees Awardable in ERISA Delinquent-Contribution Case

In Trustees of the Construction Industry and Laborers Health and Welfare Trust v. Redland Ins. Co., 2006 WL 2494038 (9th Cir. Aug. 30, 2006), the Ninth Circuit addressed whether fees generated by non-lawyers, such as paralegals and law clerks, can be recovered by pension trustees that prevail in lawsuits to collect past-due benefit contributions under U.S.C. § 1145.  ERISA provides for the mandatory award of “reasonable attorney’s fees and costs” to pension plans who recover under § 1145.

In this case, after prevailing on the merits, the joint trustees sought to recover their “reasonable attorney's fees and costs of the action” under § 1132(g)(2)(D).  The district court granted part of the fees, but did not permit recovery for work done by non-lawyers.  The court also did not allow recovery of expenses arising from the litigation.  The joint trustees appealed these rulings. 

In reversing the district court, the Ninth Circuit quoted with approval the U.S. Supreme Court holding in Missouri v. Jenkins, 491 U.S. 274 (1989):

Clearly, a “reasonable attorney's fee” cannot have been meant to compensate only work performed personally by members of the bar.  Rather, the term must refer to a reasonable fee for the work product of an attorney.  Thus, the fee must take into account the work not only of attorneys, but also of secretaries, messengers, librarians, janitors, and others whose labor contributes to work product for which an attorney bills her client; and it must also take account of other expenses and profit.

Based on the Jenkins decision, the Ninth Circuit reasoned as follows:

If the attorney's hourly rate already incorporates the cost of work performed by non-attorneys, then courts should not compensate for these costs as an additional “reasonable attorney's fee.”  The key, wrote the [Jenkins] Court, is the billing custom in the ‘relevant market.’ [Jenkins] at 288.  Thus, fees for work performed by non-attorneys such as paralegals may be billed separately, at market rates, if this is ‘the prevailing practice in a given community.’ Id. at 287.  Indeed, even purely clerical or secretarial work is compensable if it is customary to bill such work separately, id. at 287 n. 9, though such tasks ‘should not be billed at the paralegal rate, regardless of who performs them.’ Id. at 288 n. 10.

The Ninth Circuit thus concluded as follows:

If fees for work performed by non-attorneys are customarily billed separately in the relevant market, those fees are recoverable as “reasonable attorney's fees” under 29 U.S.C. § 1132(g)(2)(D).  Similarly, if the expenses specified by the Joint Trustees in this case are customarily billed separately, they are recoverable as “reasonable attorney's fees” under the same section.  We therefore reverse the judgment of the district court and remand for further proceedings consistent with this opinion. 

Click here to read the full opinion.
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